A recent survey showed that more than 30% of Germans believed Germany was "overrun by foreigners".

The study - by the Friedrich Ebert Foundation think-tank - also showed that roughly the same number thought that some 16 million of Germany's immigrants or people with foreign origins had come to the country for the social benefits.

Foreign workers
Mrs Merkel told a gathering of younger members of her conservative Christian Democratic Union (CDU) party on Saturday that at "the beginning of the 60s our country called the foreign workers to come to Germany and now they live in our country... We kidded ourselves a while, we said: 'They won't stay, sometime they will be gone', but this isn't reality.

"And of course, the approach [to build] a multicultural [society] and to live side-by-side and to enjoy each other... has failed, utterly failed."

In her speech, the chancellor specifically referred to recent comments by German President Christian Wulff who said that Islam was "part of Germany" like Christianity and Judaism

While acknowledging that this was the case, Mrs Merkel stressed that immigrants living in Germany needed to do more to integrate, including learning to speak German.

"Anyone who does not immediately speak German", she said, "is not welcome".

By speaking now, Mrs Merkel has now joined the increasingly hot debate on multiculturalism, coming down on the side of those who are uneasy about immigration, says the BBC's correspondent in Berlin, Stephen Evans.

Her comments come a week after she held talks with Turkish Prime Minister Recep Tayyip Erdogan, in which the two leaders pledged to do more to improve the often poor integration record of Germany's estimated 2.5 million-strong Turkish community.

Earlier this week, Horst Seehofer, the leader of the CDU's Bavarian sister party, CSU, said about integration that it was "obvious that immigrants from different cultures like Turkey and Arab countries, all in all, find it harder".

"'Multikulti' is dead," Mr Seehofer said.

In August, Thilo Sarrazin, a senior official at Germany's central bank, said that "no immigrant group other than Muslims is so strongly connected with claims on the welfare state and crime". Mr Sarrazin has since resigned.

Such recent strong anti-immigrant feelings from mainstream politicians come amid an anger in Germany about high unemployment, even if the economy is growing faster than those of its rivals, our correspondent says.

He adds that there also seems to be a new strident tone in the country, perhaps leading to less reticence about no-go-areas of the past.